Financial inclusion is vital for economic growth by providing affordable financial services to all. In Nigeria, disparities in financial inclusion persist due to low level of institutional. This study explores the relationship between financial inclusion and financial performance using institutional quality moderating variables. Analyzing data from 13 banks listed on the Nigerian Stock Exchange using ARDL bounds testing approach. The results show that ATM as a measure of financial inclusion improves return on equity while CBB as a measure of financial inclusion does not enhance financial performance. The study also found that rule of law contributes to ROA in the short run while control of corruption significantly enhances ROE in the long-run. The interaction of corruption and ATM enhances ROE in the short run. However, the interaction CBB and rule of law promotes the ROA in the long run. The study therefore, recommended policy for addressing corruption, strengthening legal institutions, and promoting inclusive financial practices to boost financial performance in Nigeria.

Abstract

Financial inclusion is vital for economic growth by providing affordable financial services to all. In Nigeria, disparities in financial inclusion persist due to low level of institutional. This study explores the relationship between financial inclusion and financial performance using institutional quality moderating variables. Analyzing data from 13 banks listed on the Nigerian Stock Exchange using ARDL bounds testing approach. The results show that ATM as a measure of financial inclusion improves return on equity while CBB as a measure of financial inclusion does not enhance financial performance. The study also found that rule of law contributes to ROA in the short run while control of corruption significantly enhances ROE in the long-run. The interaction of corruption and ATM enhances ROE in the short run. However, the interaction CBB and rule of law promotes the ROA in the long run. The study therefore, recommended policy for addressing corruption, strengthening legal institutions, and promoting inclusive financial practices to boost financial performance in Nigeria.